In trade, barter (derived from bareter) is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Barter is considered one of the earliest systems of economic exchange, used before the invention of money. Economists usually distinguish barter from gift economies in many ways; barter, for example, features immediate reciprocal exchange, not one delayed in time. Barter usually takes place on a bilateral basis, but may be multilateral (if it is mediated through a trade exchange). In most developed countries, barter usually exists parallel to monetary systems only to a very limited extent. Market actors use barter as a replacement for money as the method of exchange in times of monetary crisis, such as when currency becomes unstable (such as hyperinflation or a deflationary spiral) or simply unavailable for conducting commerce.
No ethnographic studies have shown that any present or past society has used barter without any other medium of exchange or measurement, and anthropologists have found no evidence that money emerged from barter. Nevertheless, economists since the times of Adam Smith (1723–1790) often imagined pre-modern societies for the sake of showing how the inefficiency of barter explains the emergence of money and the economy, and hence the discipline of economics itself.
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